Did firms substitute dividends for share repurchases after the 2003 reductions in shareholder tax rates?
By: Jennifer L. Blouin, Jana Smith Raedy, Douglas A. Shackelford
Contributors: Raedy, Jana Smith; Shackelford, Douglas A. (Douglas Alan); National Bureau of Economic Research
Series: NBER working paper series -- working paper 13601; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13601.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "This paper tests whether firms altered their dividend and share repurchase policies in response to the 2003 reductions in shareholder tax rates.  We predict that firms substituted dividends for repurchases, because the reduction in dividend tax rates exceeded the reduction in the capital gains tax rates.  As expected, we find substitution and find that it is increasing in the percentage of the company owned by individual investors, the only shareholders affected by the legislation.  These findings are consistent with boards of directors considering the tax preferences of individual stockholders (particularly officers and managers) when setting dividend and share repurchase policies"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 12/4/2007.

Includes bibliographical references.

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